Finance News

The Bureau of Ocean Energy Management has approved Equinor and Shell’s transaction announced in May 2019, whereby Equinor exercised its preferential right to acquire 22.45% interest in the Caesar Tonga oil field from Shell Offshore Inc for a total consideration of USD 965 million in cash. Equinor’s interest in the field is now 46%. Anadarko Petroleum Corporation is the operator with a 33.75% interest, and Chevron holds 20.25% interest.

Exploration performance in Norway has dropped significantly in the last five years, reflecting a deterioration of quality of the prospect portfolio. Despite this, a dramatic increase in high impact drilling is planned for 2019 – results will be a key test of Norway’s ability to sustain exploration into the future.

Newbuilding orders dropped to record lows in Q2 2019. VesselsValue's Head Cargo Analyst, Olivia Watkins, reviews which yards have received orders and which vessel types have been popular purchases.

Equinor and Barra Energia (“Barra”) have completed their transaction announced on 4 July 2018, whereby Equinor has acquired Barra's 10% interest in the BM-S-8 block in Brazil's Santos basin for a total consideration of USD 379 million.

Upon the completion of this transaction, Equinor, ExxonMobil and Galp have also completed the two further transactions previously announced on 4 July on terms equivalent to those for the Barra transaction.

As a result, Equinor’s and its partners’ interests across the two licenses for the Carcará area are fully aligned.

 BM-S-8 (after closing of transaction with Barra)BM-S-8 (after closing of transactions with ExxonMobil and Galp)Carcará North
Equinor 46.5% (operator) 40% (operator) 40% (operator)
ExxonMobil 36.5% 40% 40%
Galp 17% 20% 20%

Shell Offshore Inc. (Shell), a subsidiary of Royal Dutch Shell plc, has completed the sale of 22.45% non-operated interest in the Caesar-Tonga asset in the US Gulf of Mexico to Equinor Gulf of Mexico LLC (Equinor), a subsidiary of Equinor ASA, subject to approval of the lease assignments by the regulator. The total cash consideration was $965 million.

W&T Offshore, Inc. has announced that it has entered into a purchase and sale agreement with ExxonMobil Corporation ("ExxonMobil") to acquire their interests in and operatorship of oil and gas producing properties in the eastern region of the Gulf of Mexico (“GOM”), offshore Alabama, and related onshore processing facilities for $200 million. Key highlights of the transaction are as follows:

Westwood’s Matt Adams summarizes the very latest advancements in rig analytical tools and activity forecasting.  

Today a new white paper has been released by Westwood Global Energy Group (WGEG) to mark the launch of a new interactive forecasting tool for the global offshore rig market, the result of a round of significant investment by WGEG. RigOutlook, previously confined to a biannual PDF report, now gives users the ability to see forecast demand, supply, utilization, and day rates on a global and regional basis covering the next five years. The newly-released white paper is intended to give you an introduction to Riglogix’s newest offering and highlight some initial outputs, as well as outlining the methodologies, limitations, and considerations.

Historic Leading Day Rates by Rig Type and Date of AwardHistoric Leading Day Rates by Rig Type and Date of Award, 1st Jan 2010-1st June 2019. Line is Generated using GAM Smoothing. Source: RigLogix / RigOutlook 

While there have been improvements in the offshore rig market in the last 12-18 months, utilization remains well below the 2010-14 average of c.76% – the last ‘up-cycle’ seen in the industry. A total of 460 MODUs were working globally in May 2019, the highest level of activity since May 2016 (466 rigs working). Over the same period, supply has decreased due to 207 MODUs being removed from the fleet, although 101 newbuild deliveries have also been made.  Global utilisation across the total MODU fleet now stands at 59%, 12 percentage points higher than the lows of February 2017. Higher utilisation across the fleet has started the processes of increasing the day rate set for new contract awards (‘leading edge day rate’), although these effects are no doubt more notable in more niche markets such as the Norwegian North Sea.

While there remain some regional markets which continue to be challenged, the rig market as a whole appears to have emerged from one of the worst downturns in its history. Over the coming months and years, demand is expected to continue to increase as a backlog of delayed projects continues to be worked through, and aging, under-spec rigs continue to be retired. Whilst, even in the most optimistic scenario, it seems unlikely that the offshore rig market will return to the heights of the previous upturn, there should no-doubt be cautious optimism.

For more insights on the global offshore rig market, as well as an introduction to the methodology, considerations and limitations of Westwood’s new RigOutlook forecasting tool, request access to the RigOutlook white paper now using the form below.

Matt Adams, Senior Analyst, Rigs & Wells, Westwood Global Energy Group

Please complete the form below to receive the PDF download link.

By downloading this white paper, you agree to the Terms and Conditions of use as set out here. Only business email addresses are accepted and Westwood reserves the right to refuse delivery.

BP has agreed to sell its interests in Gulf of Suez oil concessions in Egypt to Dragon Oil, the Dubai-based oil and gas company. Under the terms of the agreement, Dragon Oil will purchase producing and exploration concessions, including BP’s interest in the Gulf of Suez Petroleum Company (GUPCO). Dragon Oil is a wholly-owned subsidiary of the Emirates National Oil Company (ENOC).

Royal Dutch Shell plc (Shell) updates investors on the company’s strategy, setting out a compelling financial outlook to 2025 and building on a strong foundation that will enable it to thrive through the transition to a lower-carbon energy system.

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